I just spent some of the morning reading the newest post on Avinash Kaushik’s blog Occam’s Razor. Avinash is the Digital Marketing Evangelist for Google, and while he doesn’t post frequently, it is always interesting and thought provoking.

Today he wrote about how to measure Facebook advertising results and how to prove the value of Facebook to upper management. I won’t lie to you – it’s a LONG post. Avinash doesn’t maintain a blog as much as he writes novellas.

I’ll try to summarize his wonderful post today in hopes that you will go to his site to read more.

1. Facebook is huge and young, and not many people know how to use it

2. Facebook can be used effectively and well beyond the general “show an ad to an audience” formula

3. Questions raised: Why is it so hard to measure/prove the value of Facebook, especially to upper management?

4. Measurement isn’t the only problem, it’s what you do with the information.

5. The path to analytics enlightenment (does not apply to Facebook)

obsess about the wrong things (impressions)

bounce rates, page views, time on site

macro and micro conversion rates, visitor loyalty

multi-channel analytics, offline value, etc

6. Most ads on FB are to drive likes and engage a temporary audience, not traffic to website

this is the main difference between Google/Bing/AOL and FB; you are spending money to build an audience on FB in the hopes that they will like you enough to recommend you to a friend and buy something down the road.

You now measure the effectiveness of building an audience (# of likes and everything else happening on FB)

If you are trying to measure bottom line metrics like conversion rates, you are missing the point of FB

7. You must convice management that FB is a value

8. Avinash will hate you if you measure likes to show value. Report instead on metrics that show interaction – Engaged Users and Virality)

9. FB offers a treasure trove of data, most of it needs deeper analysis to be useful

10. Run controlled experiments to get enhanced understanding of impact of FB

11. Create products that easily drive social activity

12. Social media success doesn’t guarantee business success

Again, this is a very condensed verison of a very awesome post from Avinash. Do yourself a favor and read the whole thing!